Asia-Pacific markets drop as investors weigh concerns over Fed hikes

Soegeefx AppsAsia MarketAsia-Pacific markets drop as investors weigh concerns over Fed hikes

Shares in the Asia-Pacific region fell on Monday as concerns over aggressive Fed hikes reemerged.

In Japan, the Nikkei 225 dropped 1.19% and the Topix index slipped 0.91%.

South Korea’s Kospi shed 1.15% and the Kosdaq lost 1.27%.

The S&P/ASX 200 in Australia dipped nearly 1%.

MSCI’s broadest index of Asia-Pacific shares outside of Japan was 0.3% lower.

China is expected to cut its benchmark lending rates later Monday, according to a Reuters poll.

.N225 Nikkei 225 Index *NIKKEI 28650.83 -279.5 -0.97
.HSI Hang Seng Index *HSI 19773.03 0 0
.AXJO S&P/ASX 200 *ASX 200 7046.9 -67.6 -0.95
.SSEC Shanghai *SHANGHAI 3258.08 0 0
.KS11 KOSPI Index *KOSPI 2461.54 -31.15 -1.25
.FTFCNBCA CNBC 100 ASIA IDX *CNBC 100 8070.31 -41.45 -0.51

“Recent Fed speakers have been stressing the message that more rate hikes are coming given the fight against inflation has not yet been won,” Rodrigo Catril, a currency strategist at National Australia Bank wrote in a Monday note.

Investors are looking ahead to the Fed’s annual Jackson Hole economic symposium which begins Thursday stateside.

Later this week, Chinese tech giants JD.com and Meituan will be reporting earnings, while Singapore will be releasing inflation data.

What to expect from Powell’s Jackson Hole speech

Fed Chairman Jerome Powell is expected to speak at the central bank’s annual symposium in Jackson Hole, Wyoming this week, and shed some light on the pace of future interest rate hikes.

Powell may advance hawkish comments from Fed officials who recently underscored their commitment to fighting inflation, even as investors enjoyed a summer rally partly on expectations of a less aggressive Fed.

Still, St. Louis Fed President James Bullard said in an interview last week with the Wall Street Journal that he is considering another 0.75 percentage point interest rate hike at the September meeting.

— Sarah Min

China is set to lower its benchmark lending rates, Reuters poll predicts

China is set to release its loan prime rates (LPR) on Monday, and analysts widely expected cuts according to a Reuters poll.

Majority of analysts predicted the one-year benchmark lending rate to be lowered by 10 basis points, while they expected the five-year LPR to be cut by more than 10 basis points.

Around half of the poll’s 30 participants forecast a 15-basis-point cut, Reuters reported.

The one-year LPR is currently at 3.7% after a cut in January, and the five-year rate is at 4.45%. China cut the five-year LPR by 15 basis points in May, in a move that was said to support housing demand.

— Abigail Ng

Source : CNBC

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